Public status will mean lower returns, SL warns members

Standard Life members will soon vote on whether to demutualise Europe's biggest mutual life assurer.

Standard Life on Monday warned its members that demutualisation would mean lower returns from its future pensions and life assurance products, because some of the profits would go to shareholders in dividends, the Financial Times reports.

The 2.3m with-profits policyholders of Europe's biggest mutual life assurer will decide whether it should convert to a public company in a special ballot to be held on June 27.

The warning from Standard Life management was in the form of a letter to members, which claimed that the organisers of the demutualisation push were “carpetbaggers” looking to make a lot of money for themselves, while overestimating the windfall for the ordinary policy-holders.

The letter also said that independent statistics proved that mutual companies had consistently outperformed public limited companies on returns for life and pensions policies over the longer term.